Energy and Sustainable in Mongolia

A report prepared by :

MONGOL

Sustainable Energy Watch2002 Report

Mongolia has tremendous potential for developing wsmall hydro. Developing local renewable sources woparticularly CO2 emissions

Dr. M. Badarch,Mongolian Environment andNature Consortium.mnec@imaginet.com

Dr. B. NMongoand TeEngine

IA

Development

ind power generation anduld decrease air pollutants,

amkhainyam,lian University of Sciencechnology Powerering School.

mail to:mnec@imaginet.com

HELIO – Mongolia 2/17

Table of contents

∙ Executive Summary p. 3

∙ General Discussion of Mongolia p. 4

▶Geographic Characteristics

▶The Constitutional Transformation to Democracy and a Market Economy

▶Mongolia's Existing Structure of Government

▶Conclusions made by Reporters on all Indicators

∙ The Eight Indicators p. 7

Environmental Sustainability

▶Indicator 1: Per Capita Energy Sector Carbon Dioxide Emissions

▶Indicator 2: Most Significant Energy-Related Local Pollutant-Table : Fuel consumption and emissions of SO2 in Mongolia

Social Sustainability

▶Indicator 3: Households with Access to Electricity

▶Indicator 4: Investment in Clean Energy

Economic sustainability

▶Indicator 5: Energy Resilience : Energy import

▶Indicator 6 : Burden of Energy Investment

Technological Sustainability

▶Indicator 7 : Energy Intensity (Energy Consumption/GDP)

▶Indicator 8 : Renewable Energy Deployment

∙ Mongolia Stars p. 16

∙ Recommendations p.17

HELIO – Mongolia 3/17

Executive summary

This report has been written in 2002 for Sustainable Energy Watch (SEW) to assessMongolian energy use in relation to its impact on Global Climate and sustainabledevelopment. SEW methodology is based on 8 indicators. For each of these indicators,the value of 1 is either the global average or the historical trend for Mongolia, while thevalue of 0 is the sustainability target. Both national sources and data from internationalorganisations (World Bank, ALGAS Project) were used in the preparation of the MongolianSEW report.

Mongolia is a large, land-locked, lightly populated eastern Asian economy sandwichedbetween Russia and China. Almost half of population is engaged in agriculture,particularly the uniquely Mongolian herding industry. The urban population is primarilylocated in the capital, Ulaanbaatar, and a few other large towns, aimag centers. Themajor industries outside of agriculture are cashmere processing, copper and gold mining,food processing, and the construction materials. Agriculture accounts for close to 33percent of GDP, industry and construction for 27.5 percent, and services for about 40percent (1998). Mining, mainly copper, provides an estimated 27 percent of theeconomy ‘s export earnings (1998).

The Mongolian transition to market economy began in 1990. By contrast with many othertransition economies, especially those from the former Soviet Union, Mongolia hassuffered a smaller fall in national output, with 1999 at 93 percent of 1989 according tothe October 2000 World Economic Outlook.

Mongolian economy consumes much more energy than the world. Tendency so far was toincrease energy consumption. The government has declared energy saving as a majorenergy strategy. However, this decision has hardly been implemented. Energyconsumers lack incentives for effective use of resources. End-use consumers often paytoo little or do not pay at all for the energy consumed.

Renewables are seen as one of the major way to reduce the country's dependence onenergy imports. Mongolian coal is of bad quality leading to low efficiency and fastdegradation of the coal-fired power plants. At the same time, Mongolia has tremendouspotential for developing wind power generation and small hydro. Developing localrenewable sources would decrease air pollutants, particularly CO2 emissions. Small localrenewable sources will help local authority to get independence from central electricitygrid.

To summarize, most of the positive trends you might notice are misleading and arecaused by the economic crisis in Mongolia. Mongolia requires urgent steps to reduce itsenergy intensity and develop renewable sources of energy.

HELIO – Mongolia 4/17

General Discussion of Mongolia

Geographic Characteristics Located in Central Asia, Mongolia is positioned between Russia to the north and thePeople's Republic of China to the east, west and south. With more than 1.5 million squarekilometers of territory, Mongolia is the fifth largest country in Asia and ranks seventeenthamong all nations. Mongolia is divided into primary natural zones that include mountainsprimarily in the country’s north and west; basins, such as that in which the capitalUlaanbaatar is located; and a mixture of desert and steppe which together cover three-fourth of the country.

Mongolia’s average altitude is almost 1,600 meters above sea level. Its higher latitudecombines with the altitude to intensify the semi-arid climate. Winters are long and cold.Average temperatures fall below freezing for six months of the year. Temperatures inJanuary average about from -25 to -40 degrees Celsius.

The Constitutional Transformation to Democracy and a Market EconomyA new Constitution embracing democracy and the market system was passed by theBaga Hural in May 1991 and adopted by the State Great Hural in January 1992. TheConstitution took effect on February 12, 1992, changing the nation from the People'sRepublic of Mongolia to Mongolia. The Constitution makes Mongolia a democraticparliamentary state with independent legislative, executive and judicial branches; itguarantees citizens freedom of speech, religion, and other basic human rights, as well asthe right to own property and engage in private business activity. The President and theParliament are elected directly by the people.

Mongolia’s Existing Structure of GovernmentMongolia is divided into 21 administrative units (provinces) called aimags. The populationof cities range in size from 50,000 to over 600,000 inhabitants in the capital ofUlaanbaatar. The cities are divided into districts. There are 9 districts in Ulaanbaatar.Urban population accounts for about 51 percent of the country's total population andthere is a strong tendency for migration from the rural to urban areas. The aimagpopulations range from 40,000 to approximately 100,000 persons. They are divided intoaimag centers and rural sums or districts around the centers. Sums are comprised ofsum centers and bags. The latter (bags) are the lowest level rural administrative. Thereare a total of 333 sums and 1,564 bags in the country.

Conclusions made by reporters on all indicatorsTo summarize the results for Mongolia on the indicators, it is helpful to review how thevectors were created. In each case, the value of 1 on the vector represents the 'statusquo' - either by reflecting world averages in the last decade or the actual country'sperformance in the last decade. The value of 0 on the vector represents the sustainabilitygoal. Move all the way to zero on a given vector means that the country's energy systemis highly sustainable along that particular dimension, whether it be economic, social,environmental or technological. Vector values greater than 1 either mean that thecountry is even more unsustainable than the global average, or is getting worse than theperformance in the last decade.

Eight indicators of energy sustainability for Mongolia

Eight indicators of energy sustainability for Mongolia1990 2000 % of change

Metric Vector Metric Vector Metric Vector1. Carbonemissions

1735kgC/cap

1.765 1096.8kgC/cap

0.958 -36.8 -45.7

HELIO – Mongolia 5/17

2. Localpollutants

22.2 kg/cap 1.0 12.8 kg/cap 0.53 -42.3 -47.0

3. Householdelectrification

85.0% 0.15 70.0% 0.30 -17.6 +200.0

4. Clean energyinvestment

US$0.2mln 1.000US$0.43mln

1.004+125.0

+0.04

5.Resilience:energy import

133.0 PJ 0.246 92.81 PJ 0.216 -31.2 -0.12

6. Governmentinvestment

US$20.0mln 0.14US$74.6mln

0.75 +273 +435.7

7. Energyproductivity

95.0MJ/US$ 9.8 88.9MJ/US$ 9.17 -6.4 -6.4

8. Renewableenergy

0.0015 1.098 0.0025 1.097 66.7 -0.09

The main reason for the value of CO2/capita being 1.6 times lower than world average is:• Low efficiency (0.2-0.5) of small capacity boilers for heating and of household

stoves;• Energy production and consumption ‘s obsolete technology;• Low consumption of renewable energy.

The drop in CO2 emissions per capita in the last decade is explained by the almost“stopped” condition of the country’s industrial sector. Although, country’s SO2 emissionsper capita are low, the concentration of SO2 in the atmosphere of Ulaanbaatar, capitalcity of Mongolia, reached a level high enough to damage human health. This is due to oldcars and to households’ emissions in the city. Currently, in Ulaanbaatar, there are 80000 stoves and 50 000 cars (most of these cars are old). The Government of Mongolia signed the United Nations Framework Convention onClimate Change on June 12, 1992 at the Rio Earth Summit and the Great Hural ofMongolia (Parliament) ratified it on September 30, 1993. Potential options and opportunities for GHG emissions mitigation in Mongolia wereidentified during the preparation of the initial National Communication. The results of theanalysis show that the country's main source of GHG emissions mitigation is the ENERGYSECTOR. The Government of Mongolia already developed a national program for the reduction ofGHG emissions reduction starting in 1999 and is implementing it. Reduction of GHGemissions depends on the development of conversion technologies and improved energyefficiency. In the near future the Law on Economical Consumtion of Energy will be passedby the Great Hural. This law will determine the method and its legal basis to increase theefficiency of the energy supply system and improve the technology used in the energysector. Almost all citizens of larger cities and rural centers have access to electricity. Mongolia isthe closest to the sustainability target on the indicators for access to electricity (0.30). There is carried out National Programme to use solar and wind mobile equipments byherdsmen. In 2001, programme to build central electric system, covering all area ofMongolia was improved by Government. Currently, it is impossible to build large size plants harnessing renewable energy, such ashydro plants, wind generation stations due to lack of financial resources and

HELIO – Mongolia 6/17

technological expertise in the country. This is one of the problems faced by Mongolia. Inthe next 4 years, Mongolia is going to give maintenance to several hydro plants, such ashydro plant of river Eg, one of the Mongolian biggest river for instance. Today, there is no gasoline processing in country. Because of this problem, the situationof importing liquid fuels from other countries will not change in the near future. However,in the eastern part of Mongolia American, Canadian and Mongolian joint venturecompanies are exploring for oil. Positive results of these explorations are already evidentand oil resources were found. Poor economy is one of Mongolian urgent problems. Due to that situation no localinvestment is made to improve energy production efficiency, increase capacity andimprove energy sector’s structures. However, it is not the best solution to resolve allthese problems by foreign investment, loan and aids. Almost all energy-using systems are old (made during the communist period). The vectorvalue of energy intensity is much higher than world average results (9.17) and cannotdecrease because of this prevalent problem. In Mongolia, plants and industries have an opportunity to save energy without cuttingtheir production, by introducing new and safe technologies and equipment.

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The Eight Indicators

Environmental sustainability

▶Indicator 1: Per capita energy sector carbon dioxide emissions Mongolia, having undergone transformation from a socialist to a democratic form ofgovernment and from a centrally planned to a free-market economic system since 1990,is at a turning point in its history. Until 1990, Mongolian economic development’s growth and GDP were increasing slowly.From 1990 economic development faced serious challenges due to the transition periodand industrial development was almost “stopped”. According to this situation, energy production and combustion decreased sharply. In1990, energy sector used 6,654,000 tonnes of coal, 1,249,000 tonnes of liquid fuel peryear. But in 2000, energy sector used 5,185,000 tonnes of coal and 524,000 tonnes ofliquid fuel per year. However, during this period (1990-2000) electricity production wasrelatively stable. 95-97% of electricity production was produced by power plants and therest by diesel generators of rural area. The main reasons for the reduction of CO2emissions are that the national industry’s “stopped ” and energy rates increased rapidly. In the last decade, a lot of efforts were done to increase the productivity of energysector’s at the Government's initiative. Also, foreign investments to implement andrenew the big-sized power plants contributed to the reduction of fuel combustion. Note: CO2 emissions from biomass fuels are not included in the calculation.

Fuel type

1990 2000

CombustionKt

Emissions,CO2 ,Kt

CombustionKt

Emission CO2 ,Kt

• Coal• Gasoline• Jet fuel• Diesel• Residual fuel oil

6654.0 541.2 34.0 554.7 63.4

9604.91731.9 108.01719.6 183.9

5185.0 272.1 30.0 191.7 30.6

7000.0 871.0 96.0 590.0 90.0

Total 7847.3 13349.0 5709.4 8647.0

In 1990, Mongolia’s total emissions of carbon dioxide were 3.64 MtC and population was2 097 700 people. So, 1990 carbon dioxide emissions per capita = 1735 kgC/cap.In 2000, total emissions of carbon dioxide = 2.64 MtC; population = 2.407 millions. 2000 carbon dioxide emissions per capita = 1096.8 kgC/cap.

Vector Value calculations:2000 vector value = (1096.8 kgC/cap - 339 kgC/cap)/791 kgC/cap = 0.958 1990 vector value = (1735 kgC/cap - 339 kgC/cap)/791 kgC/cap = 1.765

The energy sector is the largest contributor to GHG emissions in Mongolia. Activities inthis sector include fuel combustion at power and heat plants, coal production, coal andbiomass combustion in private houses for heating process. The energy sector producesaround 60% of the country’s CO2.

HELIO – Mongolia 8/17

The main type of fossil fuel used in Mongolia is coal. Natural gas is neither produced inMongolia nor imported for domestic consumption. Oil products are imported and used fortransport, power and heat plants. Consumption of fossil fuel is the greatest source ofcarbon dioxide in Mongolia. The decreased value of CO2 per capita in the last decade isdue to the almost “stopped” condition of country’s industrial sector. Along this period of time most manufactures and plants, except food processing industry,closed their doors because of the economical crisis. The main cause of reduction CO2 emissions is the diminution of energy combustion. Theindustrial sector is one of the largest energy users, consuming about 70% of theelectricity and 30% of the heat produced. New technology and equipment have not usedin energy producing and its consumption activities in period of 1990-2000.

HELIO – Mongolia 9/17

▶Indicator 2: Most significant Energy-Related Local Pollutant

SO2 emissions are given according to the country’s statistical data of fuel consumption.

Fuel consumption and emissions of SO2 in Mongolia

1990 2000 Consumption Emissions

SO2 of tonne fuel

Total SO2emissions,kt

Consumption EmissionsSO2 of tonne fuel

Total SO2emissions,kt

* Coal * Gasoline * Diesel * Residual fuel oil

6645.0 582.0 554.7

63.4

5.0 2.7 19.8

4.8

33.20 1.56 10.96

0.36

5185.0 302.1 191.7

30.6

5.0 2.7

19.8

4.8

25.9 0.8 3.8

0.15

Total 7845.1 32.3 46.1 5709.4 32.3 30.65 The average percentage of SO2 in the atmosphere of Ulaanbaatar, capital city ofMongolia, is calculated as 9-10 mg/c.m by the study. As in other countries, energyproduction and consumption in Mongolia has a wide range of local environmental impactsfrom air quality and water use to degradation of land, water and forest resources. Unlikemany developed countries however, some of the most critical problems occur at thehousehold level- from the consumption of the coal for cooking, heating- rather thanmainly from large size industrial use. Similar to many developing countries, exposure tohazardous levels of indoor air pollution outstrips outdoor air pollution as a potential causeof illness. Vector value calculations: Mongolia’s 1990 total emissions of SO2 in metric tones from fossil fuel combustion:46.1*103 tonnes; for 2000, 30.65*103 tonnes Population in 1990 = 2.0977 millions; in 2000 = 2.407 millions Mongolia‘s 1990 SO2 emissions per capita = 22.2 kg SO2/capita; in 2000 =12.8 kgSO2/capita. X(2000) = 12.8 kg SO2/capita. W = 22.2 kg SO2/capita in 1990 Y = 2.22 kg SO2/capita.; Z = 19.98 kg SO2/capita. I (2000) = (12.8-2.2) /19.98 = 0.53 I (1990) = (22.2-2.2)/ 19.98 = 1.00 Although, country’s SO2 per capita is low, the concentration of SO2 in atmosphere ofUlaanbaatar, capital city of Mongolia, reached level to damage in human health. This isrelevant to old cars and many households’ emissions in city. Currently, in Ulaanbaatarthere are 80 000 stoves and 50 000 cars (most of them old).

HELIO – Mongolia 10/17

Social sustainability

▶Indicator 3: Households with Access to Electricity

In Mongolia, 70% of all households, including urban and rural areas, had access toelectricity at the end of 2000 and 85% in 1990.

Mongolia has 335 soum centers and villages and to date 125 of these have beenconnected to the central power system. Mongolia is planning to connect 40 soum centersto the central electricity system (CES) by 2005. Currently soum centers that are notconnected to the VES do not receive an adequate supply of electricity due to difficulties indelivering electricity to rural areas.

In the past, diesel generators have been installed to meet the demand for electricity insoums. Unreliable supply and price increases of diesel oil have caused electricityproduction to decrease. In many places, diesel generators are not in operation due tolack of financial resources to purchase fuel.

From 1990, during privatization of the domestic livestock industry, the number ofherdsmen has increased in the last few years. Because of Mongolian herdsmen’ nomadiclife, the connection to CES is impossible. However, almost all households in urban areasare connected to CES.

While the number of herdsmen was 74 710 in 1990, in 2000 this number increased 2.6times. The main reason for the reduction of households with access to electricity is theincreased number of herdsmen. A few herdsmen use wind ventilators, or sun devices for lighting purposes.

Vector value calculationsFor this indicator, the value for 1 on the vector is 0% access, while the value for 0 is100% access. The vector value for Mongolia in 2000 is therefore 0.30, and 0.15 for1990.

Vector values for 1990: 0.15 and for 2000: 0.30

Almost all citizens of larger cities and rural centers have access of electricity. Mongolia iscloser to the sustainability target on the indicators for access to electricity (0.3). There isa National Programme for herdsmen to use solar and wind mobile equipments. In 2001,a programme to build central electric systems in all of Mongolia was approved by theGovernment.

It is necessary to improve the technology of burning fuels and to improve effectivecontrol on it. Our actions are not sufficient in this field. The number of families which areconnected to the electricity grid decreased because of the proportion of people who livein countryside. This is the main cause to decrease the indicator’s value. In the next 10-15 years it will stay unchanged. It is better to supply the nomads with renewable energysources in Mongolia.

HELIO – Mongolia 11/17

▶Indicator 4: Investment in clean energy

This indicator is a subsitute for job creation since investment in energy efficiency andrenewable energy create proportionally more and better jobs than centralised sources.Currently, for Mongolia, there is no other financial resources except governmentalinvestments (local investments made by Government). There is no private sector, nordirect foreign investment in the energy sector. The energy sector is wholly under thesupervision of Government. That is why there is no investment from the private sector.

For period 1995-2000, USD300 millions were invested in the energy sector by foreigncountries and international organisations. This investment was spent only for renewing,repairing old techniques, equipments and implementing automatic control systems. Thesituation, that no dollar was spent to introduce modern techniques and technologies, isvery strange. It means that foreign investment efficiency is very low.

Relative little local investment was made in the energy sector and spent for goals torepair and renew equipments. The situation, that there is no foreign investment inenergy sector is maybe relevant to country’s unstable legal and economic environment.

Although many Government programs required certain initiative be taken to implementand develop clean energy, there is no real results of these measures. For example, in2000 USD30000 from Government (local), USD400000 of foreign investment made doneto implement and develop clean energy.

However, in the next 3 years there is a probability that about USD100 millions will beinvested in this sector.

Vector value calculationsFor this indicator:

2000 non-renewable energy investment made by government is USD74.6 millions, for1990 is USD 20 millions. Note that, it was impossible to calculate 1990 investment bypresent value. 1990 and 2000 clean energy government investment: USD200 milions and 430 millions W = US$ 200.0 thous / US$ 20.0mln = 0.01 = 1% X (2000) = US$ 430 thous / US$74.6mln = 0.0057=0.57% Y = 95% of the investment of the energy sector; Z = 1-95 = -94% I (2000) = 0.57-95%/-94% = 1.004 To develop or obtain the technology and equipment which are saving it is necessaryto develop a standard on energy usage. The investment in renewable energy sector isincreasing but indeed it is still low. There are a lot of resources in renewable energy.But we almost do not use these opportunities. The economic condition does not allowto make a progress in this sector.

HELIO – Mongolia 12/17

Economic sustainability

▶Indicator 5: Energy Resilience: Energy import

Mongolia, a country of rich resource of coal, does not import this kind of fuel. Currently,there are about 20 coal mines in Mongolia. Also, from 2001, Mongolia is planning toexport coal to Russia. All kinds of liquid fuels are imported from Russia and China. By today, there is no oilextraction or refining. Usually, mazout and diesel fuel are used for energy production and also some for railwayand road transport. Gasoline is used only for air and road transport. Mongolia imports some electricity anddoes not export any kind of energy. Note: The consumption of liquid fuels in transportation was indicated as energy sector’sconsumption. Vector value For this indicator, the value of the vector 1 is 100% non-renewable energy exports shareof total imports, while the value for 0 on the vector is 0%. Total imports of non-renewable energy in Mongolia in 1990 were 32.62 PJ (132.80 PJminus 100.2 PJ renewable energy) and were dropped to19.98 PJ (92.58 PJ minusrenewable energy 72.60 PJ) in 2000 by 12.64 PJ. Total consumption of non-renewable energy in 1990 was 132.82 PJ. In 2000, it was92.58 PJ. Thus, the value of vector in 1990 for Mongolia: I = 32.62 PJ / 132.82 PJ = 0.246 The vector value in 2000: I = 19.98/92.58 = 0.216 The vector value: in 1990 was 0.246 and, in 2000, it was 0.216. Liquid fuels are only imported from Russia and China. Mazout is only used in powerplants. Diesel is used in the transportation sector and also in diesel electric stations,which produce 5% of the gross supply of electricity nation-wide. Since 1992, when thedemand of the electricity was cut, the import of liquid fuel decreased also. According tothe study, it is likely that the need of liquid fuel will increase in the road and airtransportation sector by a major amount in the next 20 years. In future we need toimport and to supply transportation and energy sector with domestic liquid fuels. For thisreason survey of oil deposits are made in Mongolia.

HELIO – Mongolia 13/17

▶Indicator 6: Burden of energy investment In 1990, Mongolia had a socialist system and any investment made in the energy sectorwere done from state budget. This situation is similar today. After the 1990 democraticrevolution, the economic potential of our country decreased rapidly. Due to this problem,the Government cannot make large investments in the energy sector. In the last few years, the condition of coal mining, large size power plants and electricaland heating plants worsened and became unable to perform regular work. Because ofthese urgent problems, all kinds of investments had to be used for repairs and torenovate major equipments in the energy sector. The Mongolian Government took discounted loans, large amount of aids from the Worldbank, the Asian Development Bank and the Japanese Government for purposes torenovate large plants such as the 3rd and 4th power plants of Ulaanbaatar City, the powerplant of Choibalsan City, the heat network of Darhan City, coal mining in Baga Nuur andShivee Ovoo. Vector value calculation The value for 1 on indicator 6 is 10% of the government investment in non-renewableenergy as a fraction of GDP, and 0 is 0% of the same. For this indicator, 2000 total government investment in energy sector is USD74.6millions, USD27.2 millions of which is allocated to fuel. 10 percent of total investment,USD7.6 millions is local investment. USD40 millions of local investment were spent forrenewing power plants and building new heat networks. GDP of 1990 and 2000 wereUSD1400 millions and USD1044 millions. In 2000, 33.44% of GDP were allocated toagricultural sector and 23% to industrial sector. 1990 vector value is I = 10*20.0/1400 = 0.14 2000 vector value is: I = 10*74.6/1044.0 = 0.715 In the period of 10 years related to the study, the investment in the energy sectorincreased 3 times. But the GDP only increased by 40%. It shows that the efficiency of theinvestment is bad. In Mongolia, the investment is mostly provided to the restoration andmaintenance of the old plants and equipments, instead of building new efficient plantsand obtaining new technologies friendly to the environment. This mistake must becorrected in the future.

HELIO – Mongolia 14/17

Technological sustainability

▶Indicator 7: Energy Intensity (energy consumption/GDP) The period 1989-1990 was Mongolian economic top point. Since this period, period oftransition to free-market economic conditions, the country’s GDP production did notincrease, in some years it even decreased. In other words, in the nineties the productionin Mongolia was falling down sharply. After 1995, industrial production increased a little and agricultural production decreaseda lot. However, agricultural sector’s automation rates relatively low in comparison withother countries in terms of energy use. In the last 10 years, final energy consumptionper GDP dropped by 60MJ/USD. This is not the result of using modern technology. The main reason of this relative high energy consumption per GDP is:

• the planning of production to produce a specific number of products (notconsidering quality or demand)

• the lack of economic incentives to reduce production costs, use of raw materialsand energy.

• There are only two big consumer plants like the copper enrichment factory Erdenet, andthe factory of metallurgy Darhan. Others are small consumers such as food industry,construction industry and some mining plants.

Vector value calculation:Mongolia is an agriculture-based country. In 2000, 33.4% of GDP was coming fromagriculture, 23% from the industrial sector. The value added of this sector is 23.2% oftotal GDP. Mongolian 2000 total GDP was USD1044.6 millions, 1990 GDP was USD1400millions.

The value for in this indicator is the 1990 global average energy intensity of 10.64MJ/US$. The value for the 0 on the vector is 1.06 MJ/ US$, or 10 percent of the 1990world average.

For this indicator, the total consumption of energy for 1990 and 2000 were 133 PJ =133*109 MJ and 92.81 PJ = 92.81*109 MJ. Mongolia GDP in these years: in 1990USD1400 millions, in 2000 USD1044 millions. Thus, energy productivity in 1990 = 133*109 MJ/USD1400*106 = 95 MJ/US$;

in 2000 = 92.81*109 MJ/USD1044.6*106 = 88.9MJ/US$The vector value in 1990: I = (95.0-1.06)/9.58 = 9.8The vector value in 2000: I = (88.9-1.06)/9.58 = 9.17

When the nation adopted the common market system, the interest in saving electricityincreased. It explains the reduction in indicator value. Now most of the plants, industriesand offices located urban centers have a heat meter.

HELIO – Mongolia 15/17

▶Indicator 8: Renewable energy deployment

Herdsmen are generally not provided with electricity. There are several ways to solve thisproblem. It is possible to construct small capacity hydro power plants, which are withoutadverse impacts to the environment, in order to supply some local centers. Also, thereare over 40 hot springs with a temperature range of 21-96C. Mongolia has 2250-3300hours of full sunshine annually and the average solar energy per year amounts to 1.400kW/sq.m. In the southern part of the country, the solar activity during the day is 4.3-4.7kWh/sq.m. However, only about 3% of the rural herdsmen currently use solar panels of9-40 W for lighting purposes. The potential reserve of wind energy in Mongolia is 836.8 billion KW/h, and it is usablefor a period of 3.5-4.6 thousand hours per year. The average velocity of the wind in thesoutheast part of the country is 4-5 m/s, has wind energy reserve of over 100W/sq.m.From 2003, Mongolia has planned to invest in the renewable energy sector and to buildseveral hydro plants with a capacity 10-40 MWt.

Vector value calculation:For this indicator, the value for 1 on the vector is the world average renewable energysupply as share of total primary energy supply (TPES) in 1995, which was 8.64% (HELIOInternational 2000). The value for 0 in the vector, which is our sustainability goal, is95%.

Total consumption of renewable energy in 1990 was 0.2*106 GJ; in 2000, 0.23*106 GJ.Total consumption of primary energy in 1990 = 132.82*106 GJ; in 2000 = 92.81*106 GJ.The renewable proportion of energy is, in 1990: X = 0.2*106GJ/ 132.82*106GJ=0.0015in 2000: X = 0.23*106GJ/ 92.81*106GJ=0.0025

The vector of Mongolia for 1990: I = (0.95-0.0015)/0.8636 = 1.098For 2000 it is : I = (0.95-0.0025)/0.8636 = 1.097

HELIO –Mongolie 16/17

Mongolia stars

1990

2000

HELIO – Mongolia 17/17

Recommendations

In the near future it is necessary to take the following decisions to improve all indicatorsparameters in Mongolia:

1. Rehabilitation and refurbishment of existing combined heat and power plant(CHP). The efficiency of the CHPs operating in Mongolia is low, especially because ofthe internal electricity need which is very high (about 20-24% of the grossgeneration).

2. To increase the efficiency of small and medium capacity boilers up to 75%.Small and medium capacity boilers use 2.5 millions tonnes of coal annually forheating over 340 residential areas all over the country. Their efficiency is quite low(40-45%) because of the outdated, inefficient design of the buildings.

3. To develop a programme and legal documents to take actions which areencouraging renewable energy source use.

Beginning of the CD-RomLIST OF REPORTSGlobal View MONGOLIA Table of contentsExecutive summaryGeneral Discussion of MongoliaThe Eight IndicatorsIndicator 1Indicator 2Indicator 3Indicator 4Indicator 5Indicator 6Indicator 7Indicator 8

Mongolia StarsRecommendations HELPExit